Azeri Minister of Economic Development to discuss acceleration of AzDRES reconstruction financing with EBRD

Business Materials 16 May 2006 15:11 (UTC +04:00)

At the end of this week, governmental delegation headed by Minister of Economic Development Heydar Babayev is heading for London to participate in 15th annual session of Council of Directors of European Bank for Reconstruction and Development (EBRD) to be held May 21 through 22.

Governmental officials told Trend they intend to discuss acceleration of talks on financing AzDRES reconstruction in Mingachevir. These talks shall be held in Baku, but approval of credit agreement must be sped up in order to start construction operations as soon as possible. Furthermore, EBRD already defined June 15 as a project review day.

EBRDs release says the project already passed structure review and is currently pending final review.

The total cost of rehabilitation of 7 units is $150mln, from which $115mln are lent by EBRD. This credit is issued under EBRDs standard terms for 15 years with 3-year delay and at libor+1% annual interest.

AzDRES of 300 MW is a dual fuel plant (fuel oil/natural gas). The plant has been in operation for more than 20 years and requires urgent modernization. The asset is of significant importance for the country because it supplies the majority of the electrical energy consumed in Azerbaijan and the region. The objectives of the proposed project are to increase the plants overall efficiency to bring the operation back to its design capacity and to enhance its reliability. The proposed project will also have a significant beneficial impact to the environment by reducing plant emissions and improving the plants fuel use and efficiency. EBRD financing will be prioritized for use on the rehabilitation of the turbine equipment and implementing environment improvement measures.